Question about stock piling/debt payoff...

**Izzy0906** · 07-22-2008, 11:52 AM

Ok, here's my question. My grocery budget is $50 weekly for 3 of us plus animal products and paper/household goods. Each week we hit right at budget but have been doing ok with that. My question is about stock piling. My stockpile went down to zero when I lost my job. Now I'm using all my extra cash starting in August to pay down my debt to be credit debt free in about 2 years (and have $500 in savings), car debt free in 3 years and mortgage debt free in about 12 years. Now I know the need for a stockpile and HATE not having one. But what do you do when you have NO extra money in a grocery budget ($50/week for 2 adults and one child and pets is TIGHT since prices went up)? HOw do you get a stockpile? DBF says take $20/month from my debt pay off money and use that but that makes NO sense to me. I want my debt GONE. any ideas? ONe thing I will be doing is sell some Nutrisystem food I have left and hopefully making about $100 on that. That I will put in an envelope for stockpiling each week with sales but what about after that?

**Greebo** · 07-22-2008, 11:57 AM

Top priorities:
Food
Shelter
Lights
Clothing
Transportation

Bottom priorities:
Debt

As long as you're meeting the minimums, if you need more for food/stockpile, then budget more, and shrink the snowball.

First things first.

**MomToTwoBoys** · 07-22-2008, 12:07 PM

You need to feed yourself first. I know you want to cut down your debt the soonest that you can, but I would also look at what Greebo has said: debt is the last priority on the list. Here is what I would suggest if you want to stockpile with a tight food budget, and the desire to kill off your debt:

1) Get the things you use every week when they're buy one, get one free.

2) Look at what you buy each week and at the end of the week, take the remainder of those items and put them away into a stockpile if you can.

3) Altering your diet, but not skipping out on nutritional value or starving yourself, to save cash and put that extra cash towards a stockpile.

4) See if you have some wiggle room to increase your food budget by about ten dollars a week.

My food budget, for four people and no pets, is $480 a month. I include $80 for a stockpile in that amount. I always end up stockpiling alot one week, and maybe not so much the next week. I always buy extra when the item is on sale. If I need canned mushrooms one week and it's a regular staple in our household (and they are on sale), I will buy double of that item.

We're in a situation to where we've been able to put money into savings and look at starting our snowball this month. I say that if you want to start your stockpile again, go with it and pay just a little more than minimum on your debts that you want to kill off.

**Mom23boys** · 07-22-2008, 12:11 PM

Originally Posted by Greebo

Top priorities:
Food
Shelter
Lights
Clothing
Transportation

Bottom priorities:
Debt

As long as you're meeting the minimums, if you need more for food/stockpile, then budget more, and shrink the snowball.

First things first.

I agree. Food needs to come before debt.

**Greebo** · 07-22-2008, 12:12 PM

Actually, I should have put it like this:
Top priorities
... the big five

Next priorities
... non negotiable payments (ie: MINIMUM payments)

Next priorities
.. debt payoff

Last priorities
.. Discretionary spending - the I Wants

**anna021** · 07-22-2008, 12:12 PM

I always keep an extra 20 or 30 dollars on the side for great stockpile deals. But normally I can work them in to my weekly budget. I'd rather have a couple meat-free meals in a week and stock up on something I know we'll appreciate having later. With the help of coupons and a great sale you can sometimes do really well with 20 dollars. All my HBA, milk, soda(DH's), cereal I get for pennies at CVS, which also helps the budget and the stockpile.

**Izzy0906** · 07-22-2008, 12:14 PM

Ok but wait, we aren't starving lol We are getting full cooked meals 7 days/week including breakfast, lunch & dinner. we've never wanted for anything. I'm just talking about in the long run. Is it worth it to have a stock pile to save a few bucks down the road in groceries or rather pay off the debt and HAVE the money to stock pile later on down the line.

**MomToTwoBoys** · 07-22-2008, 12:20 PM

I'd say it's worth it to stockpile now to save cash down the road on groceries.

**Greebo** · 07-22-2008, 12:22 PM

Well, how much are you spending extra now vs. saving long term?

If you spend $15 extra now for 3 months of supplies vs 1 month, and save $30 long term, and that savings comes back to you over 3 months, then each month you've saved $5 extra which, at the end of the run, will go back to debt payoff as an extra $15.

So if you're paying down a 25% rate credit card, and in month 1 you don't pay them $15 you would have, but in month 3 you pay $30 more...
25%/12*15*3 = $0.93 cents in interest extra paid to save $15.00 - net gain $14.07
That is:
25% per year, divide by 12 months, * $15.00, * 3 months

If you spent $5.00 to save $10.00 over 24 months for a net savings of $5.00:
25%/12*5*24 = $2.50 in interest to save $5.00 - total saved = $2.50.

If you spent $50.00 to save $60.00 over 12 months for a net savings of $10.00:
25%/12*60*12 = $15.00 in interest to save $10.00 - total saved = LOSE $5.00

So it all comes down to how much are you spending short term, what's the long term return, and what's the interest cost of the return. If the interest cost of the return > savings, don't do it.

But as you can see, the savings return would have to be VERY SLOW and VERY SMALL for it not to be worth it.

**Izzy0906** · 07-22-2008, 12:27 PM

I think I know what I'm going to do. I can make about $200 off of the nutrisystem food I will be selling. Half of that (with sales going on right now) will get me enough paper towels, shampoo, conditioner, deoderant, detergent, dryer sheets etc.. to last 3 months saving me approximately $10/week. THEN the other $100 I can use to stock up on ground turkey (25 pounds) and sausage (25 pounds) with on going sales which will last us about 2 months. Saving me an additional about $6/week. I can take that extra $16 starting this week and use that for stockpiling. That way by the time I need more of that stuff, I would have hit the sales again with my $16/week and re supplied. If that makes sense.

**shoiji** · 07-22-2008, 02:14 PM

That sounds good. Personally I like knowing I have a little stockpile in case something goes wrong with the finances, and also knowing I can continue to eat well without worrying to much about cost. You might want to try rags instead of paper towels. That will be a nice savings!! Just try to think of other ways you can save a couple bucks. It all adds up.

**peanut** · 07-22-2008, 05:55 PM

I'd be stockpiling, but I'd also look a little closer at the things I think I need and ask myself if they are really needs or wants. For example, we cut up old towels, serge the edges and use them as cloths or rags to replace paper towels. Also, in a pinch (like right now), I make my own laundry detergent and it lasts us 3 months (makes 5 gallons).

Doing little things like that saves you a lot over the long term. It all adds up.

The other thing I noticed looking at your siggy is that some of your CC interest rates are really high. Is there any way to knock those interest rates down? That might help with the debt paydown too.

Jean

**DonnainME** · 07-22-2008, 06:02 PM

I believe that you should take that $20 and stock up - sometimes you might not need the whole thing - no deals that week.

This week is one of them for US. There really isn't anything that I can see a good enough deal to stock up on. We did buy some chicken thighs and legs for .88 a lb. That's ok but not a GREAT deal. We bought 2 pks of thighs and 1 of legs. I think the packs were like $3.50 each. If I had $20 budget for stockpile and we had plenty of other foods, that would be like $10.50 towards stockpile. That leaves $9.50 left that I could pay on debt or hold until the next week to see if I could find deals.

**frugalandsimple** · 07-22-2008, 06:06 PM

Take advantage of any great bargains that will benefit you and your family in the long run.

**ironmaiden** · 07-22-2008, 08:12 PM

What is the purpose of the stockpile?

To buy the items that you use the most when they are on sale and to not buy them when they are not?

To buy food now because you believe that inflation will make the same products more expensive 6 months later.

To have enough food in the house in case the roads are impassible due to storms, a specific product shortage ex. a toilet paper shortage, a trucking strike, situations where you don't want or told not to leave the house ex.terrorist activity, bird flu?

To have months to a year of food in the home to sustain the family in times of personal economic crisis - low on cash, layoffs, out of work on short term disability or maternity leave.

And a word about the mortgage. Do not make extra payments on the mortgage unless you have a good emergency fund built up. The mortgage company will not care that you sent in extra all these years if the situation comes up that you can't meet the next couple months. You'd hate to have prepaid and then be foreclosed upon.